Does the Bonchon franchise agreement supersede any prior funding commitments related to the purchase of Postmix Products by a Participating Franchisee?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
During the Term, Participating Franchisee will purchase Pepsi-Cola's and the Partnership's corporate branded postmix products ("Postmix Products") from Pepsi-Cola and the Partnership for use in preparing fountain beverage products sold under the trademarks of PepsiCo and the Partnership ("Fountain Products"). In addition, during the Term, Participating Franchisee will purchase packaged beverage products (including but not limited to carbonated soft drinks, teas, energy drinks, waters, isotonics, juices, juice drinks, dairy-based beverages and/or coffee-based beverages) marketed and sold under the trademarks of PepsiCo, its subsidiaries and affiliates and the Partnership (collectively, the "Packaged Products"). Packaged Products and Fountain Products are referred herein as "Products." Products shall be sold by the Participating Franchisee in existing, future and after-acquired (provided not already under a pre-existing beverage agreement with Pepsi-Cola) outlets owned, operated, managed, leased, franchised and/or licensed by Participating Franchisee in the 50 United States (and D.C.) under the Bonchon Korean Fried Chicken trademark (and/or any related or similar trademarks, including any successor trademarks/tradenames) ("Outlets"). Throughout the Term, the Outlets will continuously serve, dispense, sell and/or otherwise make Products available throughout its Outlets. A list of all Outlets initially included within the scope of this Agreement is attached to this Agreement as Exhibit B.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
Based on the 2025 Bonchon Franchise Disclosure Document, the franchise agreement addresses the purchase of Pepsi-Cola's and the Partnership's corporate branded postmix products ("Postmix Products") and packaged beverage products. Participating Franchisees are required to purchase these products from Pepsi-Cola and the Partnership for use in preparing fountain beverage products sold under the trademarks of PepsiCo and the Partnership. These products must be sold in all outlets owned, operated, managed, leased, franchised, and/or licensed by the Participating Franchisee under the Bonchon trademark within the 50 United States and D.C.
However, the FDD does not explicitly state whether the Bonchon franchise agreement supersedes any prior funding commitments related to the purchase of Postmix Products by a Participating Franchisee. The document outlines the obligation to purchase Postmix Products from specific suppliers but does not address the scenario where a franchisee might have pre-existing funding agreements related to these purchases.
Therefore, a prospective Bonchon franchisee should seek clarification from the franchisor regarding how the franchise agreement interacts with any prior funding commitments they may have for Postmix Products. Specifically, they should inquire whether the obligation to purchase from Pepsi-Cola and the Partnership overrides any existing financial arrangements with other entities.